SolarWorld Trade Dispute With China Divides U.S. Solar Industry

Oct. 21 (Bloomberg) -- A trade complaint seeking to protect
U.S. solar-panel makers from unfair competition from China may
harm other parts of the U.S. solar industry, project developers
said.

The complaint filed Oct. 19 by the U.S. unit of Bonn-based
SolarWorld AG and six other panel companies asked the government
to impose duties on more than $1 billion of Chinese imports.

The action may drive up prices for U.S. companies that
purchase solar panels and slow the installation of renewable
energy systems, said Arno Harris, chief executive officer of
Recurrent Energy, the San Francisco-based project development
unit of Sharp Corp. Solyndra LLC, the failed panel company that
received a $535 million U.S. Energy Department loan guarantee,
cited cheap Chinese products in its September bankruptcy filing.

“You have a group of manufacturers whose product is not
competitive and they’re turning to trade mechanisms,” Harris
said in an interview yesterday. The dispute may hinder U.S.
consumers’ use of solar power, and “is fundamentally a
mistake.”

The complaint filed with the International Trade Commission
alleges that Chinese companies have sold solar panels below
cost. China produced 55 percent of the world’s panels in 2010,
according to Bloomberg New Energy Finance.

The dispute serves the interests of U.S. manufacturers, not
other companies in the solar industry, Harris said. “It’s a bit
‘the pot calling kettle black’ here,” he said. “If their
complaint was valid, you’d see Chinese companies benefiting. In
fact they are suffering as well.”

China’s ‘Positive Role’

Nor will it help companies build solar projects, said
Carlos Domenech, president of SunEdison, the development unit of
St. Peters, Missouri-based MEMC Materials Inc.

“I think China is playing a positive role in lowering
panel costs for U.S. consumers,” he said yesterday in an
interview at the Solar Power International conference in Dallas.
“Reducing the cost of panels also helps create green jobs in
the U.S.”

The dispute is “a matter of manufacturer versus
manufacturer and it’s not the whole industry,” Rhone Resch,
chief executive officer of the Solar Energy Industries
Association, said in an interview.

He said the Washington-based trade group hasn’t taken a
position on the trade fight. “We’re not involved so our role is
only to keep people informed of what develops.”

The U.S. exported more solar products last year than it
imported, by $1.9 billion, according to an August report from
SEIA and GTM Research. Polysilicon, the raw material in solar
cells, and manufacturing equipment made up the majority of the
$5.63 billion in exports, and much of that went to China. The
U.S. imported $2.4 billion in solar panels.

Falling Panel Prices

Cuts in incentives in Europe and large increases in
production drove down solar-panel prices more than 40 percent
this year, breaching the $1-a-watt milestone this month, Aaron
Chew, an analyst at Maxim Group, said in a research note
yesterday.

SolarWorld is part of the newly formed Coalition for
American Solar Manufacturing, whose six other members are also
petitioners in the ITC complaint. The company’s SolarWorld
Industries America Inc. unit received an $82.2 million clean
energy manufacturing tax credit to expand a plant in Hillsboro,
Oregon, in January 2010.

The six companies haven’t been identified. “It is not
uncommon that companies will support a case and have their
identity remain confidential,” Adam Gordon, a partner at Wiley
Rein LLP, which filed the petition for SolarWorld, said in an
interview.

“This petition is supported by a significant majority of
the U.S. industry,” Gordon said, which the petition defines as
“the domestic industry producing crystalline silicon
photovoltaic cells and modules.”

Suntech Power Holdings Co., the world’s largest solar panel
maker, is reviewing the complaint. “Anyone can file one of
these actions,” the Wuxi, China-based company said yesterday in
a statement. “We are confident in our position and well-prepared to substantiate our strict adherence to fair
international trade practices.”